Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — Investor Day (September 2019)
24 slides from Cnh Industrial's investor day presentation, Sep 3, 2019
Slide 1: CNH Industrial Strategy - Capital Markets Day 2019
New York City September 3, 2019 CNH INDUSTRIAL Hubertus Mühlhäuser STRATEGY Chief Executive Officer CAPITAL MARKETS DAY 2019
Slide 2: CEO Findings After 1 Year: Strong Foundation to Build On
CEO FINDINGS AFTER 1 YEAR STRONG FOUNDATION TO BUILD ON TECHNOLOGY Strong innovation pipeline across segments addressing disruptive trends & INNOVATION However, underinvested in some areas OPERATIONS Best-in-class operational and commercial capabilities & COMMERCIAL However, high complexity and over
Slide 3: Priorities and Achievements After 1 Year
PRIORITIES AND ACHIEVEMENTS AFTER 1 YEAR CNH INDUSTRIAL DESTINED FOR SUCCESS 1 Continued operational performance with consistent margin improvements 2 Developed strategic roadmap and addressed portfolio questions Significant value creation potential ahead 3 Built leadership team and organization to
Slide 4: CNH Industrial Global Executive Committee
Hubertus Mühlhäuser Chief Executive Officer Max Chiara Derek Carl Gustaf Gerrit Annalisa Oddone Chief Financial Officer and Neilson Göransson Marx Stupenengo Incisa Chief Sustainability Officer President President President President President Andreas Weishaar Agriculture Construction Commercial Pow
Slide 5: Economic and Social Macrotrends Changing Our Future Environment Today
ECONOMIC AND SOCIAL MACROTRENDS CHANGING OUR FUTURE ENVIRONMENT TODAY CONNECTED- CLIMATE POPULATION URBANIZATION NESS CHANGE Population growth: Rural exodus: Connected devices: Economic impact: +2B people by 2050 1.5M people move into Expected to double from 11% of the world's urban areas each week
Slide 6: Industry and Technology Megatrends Transforming the Capital Goods Industry
INDUSTRY AND TECHNOLOGY MEGATRENDS TRANSFORMING THE CAPITAL GOODS INDUSTRY ALTERNATIVE DIGITALIZATION AUTONOMOUS SERVITIZATION PROPULSION Broad diffusion of digital Automation enabled by Rise of "as a service" Tightening emission rules and connected digitalization and robots offerings in capital goo
Slide 7: CNH Industrial Group Strategy on 1 Page: Transform 2 Win
CNH INDUSTRIAL GROUP STRATEGY ON 1 PAGE WE CALL IT "TRANSFORM 2 WIN" Purpose Corporate objectives Segment strategies Functional strategies Values 7
Slide 8: Purpose and Values
PURPOSE POWERING SUSTAINABLE TRANSFORMATION VALUES PASSION ENTREPRENEURSHIP TEAM SPIRIT EXCELLENCE 8
Slide 9: Corporate Objectives: Transforming CNH Industrial to Its Full Potential
CORPORATE OBJECTIVES TRANSFORMING CNH INDUSTRIAL TO ITS FULL POTENTIAL STRATEGIC THEMES CORPORATE OBJECTIVES Innovation and Grow net sales* thought leadership 5% CAGR Improve and simplify operations Delivering Industry-benchmark Adj. EBIT margin* ~10% superior total margin performance (+400 bps) Adj
Slide 10: Functional Strategies: Corporate-Wide Transformation Initiatives
FUNCTIONAL STRATEGIES CORPORATE-WIDE TRANSFORMATION INITIATIVES DIGITALIZATION AFTERMARKET SOLUTIONS SUPPLY CHAIN EXCELLENCE 85% of new products digitally born and 80/20 SIMPLIFICATION connected MANUFACTURING NETWORK EMPLOYEE ENGAGEMENT 10
Slide 11: Functional Strategies: Aftermarket Solutions
FUNCTIONAL STRATEGIES CORPORATE-WIDE TRANSFORMATION INITIATIVES DIGITALIZATION AFTERMARKET SOLUTIONS Grow aftermarket sales and services from 16% SUPPLY CHAIN EXCELLENCE to 20% of net sales* 80/20 SIMPLIFICATION Outgrow equipment sales by 2× MANUFACTURING NETWORK EMPLOYEE ENGAGEMENT 11 * Industrial
Slide 12: Functional Strategies: Supply Chain Excellence
FUNCTIONAL STRATEGIES CORPORATE-WIDE TRANSFORMATION INITIATIVES DIGITALIZATION AFTERMARKET SOLUTIONS Save 1% on annual procurement spend SUPPLY CHAIN EXCELLENCE Save 4% per year 80/20 SIMPLIFICATION through World Class Manufacturing MANUFACTURING NETWORK EMPLOYEE ENGAGEMENT 12
Slide 13: Functional Strategies: 80/20 Simplification
FUNCTIONAL STRATEGIES CORPORATE-WIDE TRANSFORMATION INITIATIVES DIGITALIZATION AFTERMARKET SOLUTIONS Consolidate dealer network by net 10% SUPPLY CHAIN EXCELLENCE Simplify product line 80/20 SIMPLIFICATION and reduce number of SKUs by 50% MANUFACTURING NETWORK EMPLOYEE ENGAGEMENT 13
Slide 14: Functional Strategies: Manufacturing Network
FUNCTIONAL STRATEGIES CORPORATE-WIDE TRANSFORMATION INITIATIVES DIGITALIZATION AFTERMARKET SOLUTIONS Right-size operational footprint by 1.2M sqm/ SUPPLY CHAIN EXCELLENCE 12.9M sqft 80/20 SIMPLIFICATION Increase utilization from 66% to 85% MANUFACTURING NETWORK EMPLOYEE ENGAGEMENT 14
Slide 15: Functional Strategies: Employee Engagement
FUNCTIONAL STRATEGIES CORPORATE-WIDE TRANSFORMATION INITIATIVES DIGITALIZATION AFTERMARKET SOLUTIONS All employees are engaged and live up to SUPPLY CHAIN EXCELLENCE our values 80/20 SIMPLIFICATION Strengthen diversity & inclusion MANUFACTURING NETWORK EMPLOYEE ENGAGEMENT 15
Slide 16: Segment Strategies: Transforming Industrial Segment Performance
SEGMENT STRATEGIES TRANSFORMING INDUSTRIAL SEGMENT PERFORMANCE COMMERCIAL FINANCIAL AGRICULTURE CONSTRUCTION VEHICLES POWERTRAIN SERVICES Leader in sustainable Focused Leader in sustainable Leader in alternative Customers centric Thrust agricultural solutions leadership position transportation propu
Slide 17: CNH Industrial Group Strategy on 1 Page: Transform 2 Win
CNH INDUSTRIAL GROUP STRATEGY ON 1 PAGE WE CALL IT "TRANSFORM 2 WIN" Purpose Powering Sustainable Transformation Grow Sales Improve and Simplify Operations Optimize Capital Allocation Corporate Net Sales** Adj. EBIT margin** Adj. EPS ROIC** objectives* +5% CAGR ~10% (+400 bps) ~18% CAGR ~20% (+600 b
Slide 18: Corporate Portfolio Review: Three Lenses
"TRANSFORM 2 WIN": CORPORATE PORTFOLIO REVIEW ASSESSED CNH INDUSTRIAL PORTFOLIO COMPOSITION THROUGH THREE LENSES Strategy lens Market attractiveness Competitive dynamics Investor lens Defining the optimal Focused business model portfolio composition Investor preferences Synergy lens Techno
Slide 19: Results of Corporate Portfolio Review: Three Lenses, One Conclusion
RESULTS OF CORPORATE PORTFOLIO REVIEW THREE LENSES – ONE CONCLUSION Most megatrends evolving Strategy lens on- and off-highway segments Market attractiveness differently Competitive dynamics Varying market outlook of on- and off-highway segments Investor lens Different competitive dynamics
Slide 20: Results of Corporate Portfolio Review: Investor Lens
RESULTS OF CORPORATE PORTFOLIO REVIEW THREE LENSES – ONE CONCLUSION Capital markets prefer focused Strategy lens business models (pure play) Market attractiveness Competitive dynamics Varying investor expectations towards on- and off-highway companies Investor lens Significant sum-of-the-p
Slide 21: Results of Corporate Portfolio Review: Synergy Lens
RESULTS OF CORPORATE PORTFOLIO REVIEW THREE LENSES – ONE CONCLUSION INTER ON-/OFF-HIGHWAY SEGMENT Low High Autonomous Strategy lens TECHNOLOGY Alternative & INNOVATION propulsion (MEGATRENDS) Digital Market attractiveness Servitization Competitive dynamics OPERATIONS Commercial & COMMERCIAL Engi
Slide 22: Transform 2 Win
» TRANSFORM 2 WIN
Slide 23: Corporate Transformation: Creating Two Global Leaders in Their Industries
CNH INDUSTRIAL CORPORATE TRANSFORMATION CREATING TWO GLOBAL LEADERS IN THEIR INDUSTRIES GLOBAL LEADER IN SUSTAINABLE AGRICULTURE AND CONSTRUCTION Vision: Be the partner of choice to feed and build the world NET SALES: ADJ. EBIT: AG CE SV $15.6B $1.0B GLOBAL LEADER IN SUSTAINABLE TRANSPORTATION AND P
Slide 24: Safe Harbor Statement and Disclosure
SAFE HARBOR STATEMENT AND DISCLOSURE All statements other than statements of historical fact contained in the slides presented today including statements regarding our competitive strengths; business strategy; future financial position or operating results; budgets; projections with respect to reven